Through the sheer ingenuity of their Internet-based promotional
and sweepstakes management service, RealTime Media Inc. co-founder
Chuck Seidman and his partners, Bruce S. Allen, Bob Auxier, Peter
Jensen and Charles Ruderman, have persuaded some of America's
most admired companies to hire them.

The Haverford, Pennsylvania, firm has a lock on the technology
for creating scratch-and-win promotions on the Internet (patent
pending). Rather than scraping faux gold leaf off of a paper
ticket, Internet surfers scratch away with their mice to reveal
whether they've won prizes.

As it turns out, the lure of winning $1 million instantly--or,
as with the current Beat the Street promotion, $20 million for
correctly guessing the close of the Dow Jones and NYSE average on a
particular day--is an extremely effective technique for directing
Internet surfers to a particular site. "It's all about
driving traffic," says Seidman, 47. "Being on the
Internet means nothing unless you can get traffic to your site and
convert [surfers] into members or give them incentive to take a
desired action." Apparently the heavyweights agree, because
the likes of Microsoft, Lycos, Ford, Yahoo!, the NFL and CDnow have
hired RealTime to create custom instant-win promotions to drive
traffic to their Web sites.

All this has been accomplished with the kind of entrepreneurial
panache successful companies are made of. Still, Seidman
understands that Internet promotion is big business--and his
competition is well-funded. "To compete and take this company
where we know it can go, we need more capital," he says.

Seidman figures his company needs $3 million, which has him
beating the bushes for angel investors. Unlike the promotions
he's creating, bringing angels to the table is no game.

For companies like RealTime, raising money from angels, or any
kind of investor for that matter, generally is done in four steps:
identifying prospects, preparing to contact them, contacting them
and closing them. But as with falling dominoes, everything depends
on that first critical action. And in this case, entrepreneurs
can't possibly hope to finalize deals with angel investors
until they succeed in locating prospects.

So where do angels hover? There are a number of predictable
haunts, ranging from Internet and chamber of commerce cliques to
universities, business incubators and your professional advisors.
Here's a rundown on how to get started. (And remember, none of
this will be easy, so be prepared to dig hard.)

Cast Your Net

For many people, a starting point in the quest for angels is the
Internet. But keep in mind that at this point, the Internet is a
communications medium, not a capital-formation medium. It may turn
up leads, but it's not going to deliver the goods lock, stock
and barrel.

A good first stop is ACE-Net, an SBA initiative that uses the
power of the Internet to match entrepreneurs with accredited
investors. By listing your deal on ACE-Net, you make yourself known
to the thousands of angel investors who have access to the
site.

Moreover, according to Jere Glover, chief counsel of the
SBA's Office of Advocacy, ACE-Net now offers contact
information for 38 so-called nodes that can act as
entrepreneurs' connections to angel investors. "Many of
these nodes operate their own angel networks," Glover says.
Their names, addresses and telephone numbers can be found at
https://ace-net.sr.unh.edu. (The
"https" designation indicates that ACE-Net is a secure
site, with limitations on access.)

You can also type the words "angel investor" into your
search engine, and all manner of matter will surface. There's
something new on the Internet every day and some of what comes up
may be worth looking into. But beware: There's a lot of junk
out there, too.

Under The Bright Lights

Another place where angels sometimes congregate is the business
incubator. Angels like new business activity, and incubators are
often full of promising start-ups. According to Dinah Adkins,
executive director of the National Business Incubation Association,
some 60 percent of the 550 business incubators in North America
offer formal or informal access to early-stage financing, which
often means angels.

In addition, many incubators screen applicants, offering what
amounts to a quality-control mechanism that attracts investors. In
short, you can gain access to angel investors simply by being a
member of the club. You can obtain a list of incubators nationwide
by sending a self-addressed stamped envelope to the National
Business Incubation Association, 20 E. Circle Dr., #190, Athens,
OH, 45701-3751. You can also call (740)593-4331 or visit its Web
site at http://www.nbia.org.

The School District

Universities with entrepreneurship programs can be fertile
ground for finding angels. The connection between entrepreneurial
academia and successful business start-ups is so well-established
(Stanford University and Cisco Systems--need we say more?) that
universities attract even more angel investors than incubators
do.

The important thing is getting in, seeing if there's a vein
to be mined and, if there's not, moving on. Many universities
have alumni angel networks, SBA-sponsored Small Business
Development Centers, and professors and deans who are wired into
angel investors, as well as new venture workshops that are really
networking opportunities.

If there's a university nearby and it has an
entrepreneurship program (no matter how formative), it's
worthwhile to call someone on the teaching staff, make an
appointment and sit down with him or her to see how the program can
help you find investors. If you have a choice of universities
nearby and you want to determine which has the top program, buy a
copy of a study that was published in The Journal of Business
Venturing called "Measuring Progress in Entrepreneurship
Education" by Elsevier Science. Call (800)282-2720 for a
reprint of this article, which appeared in Volume 12, Issue 5 of
the publication. The cost is approximately $44.

Press The Flesh

There are any number of formal networking events organized for
the express purpose of putting angel investors in direct contact
with capital-hungry entrepreneurs. For example, MIT Enterprise
Forums, which are held in some 14 cities across the United States
and five additional international cities, take the form of a
business-plan presentation--followed by a critique of both the plan
and presentation--to professional investors, who are often
institutional venture capitalists. But there's plenty of time
before and after the program to network, see and be seen, pass out
cards, and find leads.

Other formats include panel discussions, breakfast workshops,
cocktail receptions and brown-bag seminars. Sponsors range from
chambers of commerce and professional consulting organizations to
universities and state economic development organizations. There
are also venture fairs, which give entrepreneurs direct contact
with angels in a "walk the midway"-type arrangement. You
need to be careful with fairs, however. Many such events are
organized to put companies in front of institutional venture
capitalists. If you don't qualify for that kind of
investment--and very few small businesses do--you'll find
trying to get a slot to be a frustrating and generally unproductive
use of your time.

To find your venue, call the nearest chamber of commerce and ask
if they have a venture group. If you need to locate a chamber near
you, call the U.S. Chamber of Commerce in Washington, DC, at
(202)659-6000 or visit its Web site at http://www.uschamber.org. If you
want to find out if there's an MIT Enterprise Forum scheduled
for a city near you, call the MIT Enterprise Forum headquarters at
(617)253-0015 or visit its Web site at http://web.mit.edu/entforum/

Hire A Professional

At the end of the day, it's still the lawyers and
accountants who best know where the money is. And either overtly or
subtly, part of what many of them are selling is access to
investors that might have an interest in your business. In fact, if
you own a hotshot technology or Internet company, some law firms
and accounting firms will actually defer some (or, if you're
lucky, all) of their fees until funds are raised.

At RealTime, Seidman retained Philadelphia-based powerhouse
Morgan, Lewis & Bockius, where Stephen Goodman is the lawyer of
choice to the region's growing cadre of tech companies.
"If there's somebody we need to get to," says
Seidman, "he can be effective in making an
introduction."

Unfortunately, you can't simply call an attorney or
accountant and tell them to turn on the spigot; it's got to be
done in the context of an engagement--some engagement, any
engagement, that gets everything on a professional footing, such as
assistance with financial projections. As the twist to the old
saying goes, it takes money to raise money.

Meanwhile, back at RealTime, Seidman and his partners are caught
in the archetypal entrepreneur's warp. They're so busy
building and running the business that raising money becomes even
more challenging. "The only thing I can say," says
Seidman, "is that it's a good thing there are so many
paths we can take. Otherwise, we'd never find the time to find
the investors."

Next Step

In addition to the organizations listed in this column, the
following are some useful Internet privacy sources for small
companies:

Contact Source

David R. Evanson's newest book about raising capital is
called Where to Go When the Bank Says No: Alternatives for
Financing Your Business(Bloomberg Press). Call (800)233-4830 for
ordering information. He is a principal of Financial Communications
Associates in Ardmore, Pennsylvania. Art Beroff, a principal of
Beroff Associates in Howard Beach, New York, helps companies raise
capital and go public.